Utah Solar Panels: Rebates and Incentives
The Red Desert of Utah
2012 Utah Solar Panels Update
Ah, the “Greatest Snow on Earth.” Not a skier? Utah is also home to Moab, Zion & Arches National Parks, Bryce Canyon the north rim of the Grand Canyon, Lake Powell and more. Oh yeah, and the Great Salt Lake too. With all of those great things to see outdoors, Utah needs renewable solar power to keep looking good. What has the Utah legislature done so far to promote solar panels? Have a look…
Utah’s Renewable Portfolio Standard
A Renewables Portfolio Standard (“RPS”) is a law or other piece of regulation that mandates that a certain percentage of at state’s energy production comes from renewable resources by specified target dates. Or at least, an RPS usually mandates minimum levels of renewable energy. Utah’s law is probably better described as setting renewable energy goals.
Utah’s RPS only requires utilities to implement renewable energy to the extent it is cost-effect; The guidelines for determining the cost-effectiveness of acquiring an energy source are up to the Utah Public Service Commission (“PSC”). Factors weighed in determining cost-effectiveness include cost of the electricity, as well as long-term and short-term impacts, risks, reliability, financial impacts on the affected utility, and other factors, as determined by the PSC. To the extent that the PSC finds renewable energy cost-effective, the goal here is to generate 20% of our electricity from renewable resources by 2025.
Usually there is a pretty direct link between the strength of an RPS and the number and size of incentives available for solar power. 20% by 2025 would be a solid RPS if those targets were mandatory rather than conditional. Given the “if cost-effective” condition of Utah’s RPS, it’s hard to judge just how effective it will be over the long-term. So far it’s generated a few decent incentives for future solar-power system owners, but nothing to write home about …
Solar Performance Payments in Utah
A strong performance payment incentive is one of the best ways to bring down the payback time on your investment in solar power. Many states with strong mandatory RPS’s have a performance incentive that pays you for every kilowatt hour (“kwh”) of solar electricity that you produce. Unfortunately there are no such incentives available here.
Utah Solar Panel Utility Rebates
There are, however, a couple of utility rebates available for Utah solar panels. Rocky Mountain Power: Utah’s largest electricity supplier, offers a rebate of $1,550/kilowatt (“kw”) up to a maximum incentive of $4,650; and Washington City power customers are eligible for a rebate of $2,000/kw up to a cap of $6,000.
Utah Solar State Tax Credits
Whether or not you’re getting any utility rebates, everyone in Utah is eligible to take a personal tax credit when you install solar panels. The tax credit for a residential system is 25% of the purchase and installation costs, up to a maximum of $2,000.
Solar Panel Tax Exemptions in Utah
Lawmakers in Salt Lake City have also passed a sales tax exemption for Utah solar panels. Sadly, however, to qualify for the exemption you have to purchase a system of with a capacity of at least 20kw. That rules out most normal-sized residential solar panel systems.
While larger customers at least get to take advantage of a sales tax exemption, there’s no property tax exemption at all. If we had to pick one to implement for residential customers here, it would definitely be the property tax exemption. Saving that 6-8% sales tax up front would be great, but saving on property taxes year after year would save you more in the long run.
Utility Prices in Utah
Utah pays an average of 10.36 cents per kilowatt-hour of electricity. That’s more than a full cent below the national average of 11.43 cents/kwh. We get it. You like paying less. Just don’t forget why electricity is cheap right now … because it’s generated using tons (billions of them, literally) of fossil fuels. Dirty burning, smog-spewing, greenhouse gas-emitting, earth-killing fossil fuels.
Sooner or … even sooner, all those fossil fuels really start to bite us in the butt, or start to run low (or both) and electricity rates are going to rise fast. When that happens you’re going to be really, really happy you switched early to all that efficient, clean solar power that will be in high demand.
In the meantime, you can still save a chunk of change with solar panels in Utah. We’ll go over just how much in a minute.
Utah Net Metering and Interconnection
Net Metering requires your utility to monitor how much energy your solar power system produces and how much energy you actually consume, and make sure you get credit for the surplus. Utah law requires Rocky Mountain Power (“RMP”) and almost all electric co-ops to offer net metering for solar panels. Net metering is available for residential systems up to 25 kilowatts (kW) in capacity and non-residential systems up to two megawatts (MW) in capacity.
The net metering program varies depending on your utility. Rocky Mountain Power customers will be credited for surplus on your next month’s bill at the full retail rate. Customers of electric cooperatives will receive credits at the wholesale rate. Rocky Mountain Power also has a much high aggregate capacity limit of 20%, compared to 0.1% for electric co-ops. That a much higher percentage of RMP customers have access to the program. While we’d like to see that capacity limit raised for co-ops, that’s an excellent statewide net metering program overall.
Interconnect is strong here as well. Your Utah solar panels qualify for the simplest application procedures. Even better, your small residential system is exempt from any insurance coverage requirement, and from installing a redundant external disconnect switch, both of which save you money.
5kW Example Return on Investment for Utah Solar Panels
What do all the numbers add up to for you? Let’s check:
We based our Utah solar panel rebate numbers for a resident of the Salt Lake City area. Depending on where you live, there’s a good chance you get more sun than city residents, particularly in the south part of the state. You also may pay less for electricity. The best way to find out how much cash switching to solar panels can save you is to get one of our free quotes, and an expert installer in your area can draw up a home-specific estimate for you.
Installing a typical 5kW solar panel system in Utah should start at about $25,000. Don’t freak – that’s gonna drop fast!
- Start with that rebate from Rocky Mountain Power. Subtract $4,650 for a new price of $20,350.
- Next subtract the $2,000 state tax credit for a new price of $18,350
- The feds calculate your federal solar tax credit based on out of pocket costs. Take off 30% of $20,350 ($6,105) for a new price of $12,245
- With a conservative estimate for the future rise of electricity prices, you can expect your new solar power system to pay for itself in about 13 years. After that you’ll still have lots of years of profits … yes we said profits … to the tune of nearly $22,000.
- In addition to those direct wallet-fattening savings, you also increased your home value by $14,545.
- Don’t forget that on top from all that green in your pocket, you’ve created a bunch of green for the planet; 124 trees worth, every year your solar power system is humming, and you’re not buying fossil-fuel based electricity.
Remember that these numbers are estimates. Your home is unique, and how much money solar can save you depends on a number of factors. Like we said earlier, the best way to know exactly how much money solar power can save you is to talk to one of our partners on the ground. Just fill out the form below and one of then will be more than happy to go over all those details and help you craft a plan to get the absolute most out of a solar power system in your home. Your quote is 100% free (yes, that’s right, 100% free) and you can get as many of them as that smart shopper in you desires!
Utah Solar Panel Consensus
The solar outlook here is adequate, but far from the best we’ve seen. Legislators have done a nice job balancing utility and state-backed rebates. That’s brought the cost after year 1 to very reasonable levels. Unfortunately the payback time frame is still a good deal too slow for a state with as much sun as Utah. Until that payback time frame gets faster than 13 years, we can’t give Utah any more than a “C” grade for solar policy.
Logan City also offers a solar rebate of 2000 a kw with a cap of 6,000 for residential and 25,000 for commercial.
Laraine Swenson, Logan City Council
Thanks so much for letting us know about that credit Laraine!
The “Personal Tax Credit – * Renewable Energy Systems Tax Credit (Personal)” does not work.
Link fixed. Thanks for the headsup!
I would like some information about placing solar power in a building. I do not know who to contact, feasibility, costs,…
Hi Tyler,
Fill out one of our expert contact forms and we’ll hook you up with a solar expert.
Cheers,
- Dan
Yeah right! Eventually everything needs fixing. Usually at a very inconvenient time.
So lets say I install a solar power system for 20 thousand dollars, I can now look forward to not having an energy bill for 15 or 20 years? I don’t think so.
Solar panels, like the shingles on your house, sit in extreme cold, extreme heat, rain, wind and dust that blows through the air.
I have a feeling they’ll need to be replaced before 15 years are up.
I have little solar lights in my driveway, and they have worked great. For about three years.
Now the solar panels on them have yellowed in the sun and are not as efficient as they were new. The batteries need replacing.
Yea right,
While true solar panels do indeed sit in extreme heat, rain, wind, and dust, depending on the manufacturer, you can expect they will produce at at least 80% of their original output at year 25.
Now, more solar installers are actually guaranteeing this performance and are including energy monitoring software so you can see how many kWh you produce over time. If production ever dips below that amount, they’ll come out and replace the panels at no additional cost.
Check it out and ask about energy performance guarantees w/ monitoring.
Cheers,
- Dan
You need to do some major updating on this site to keep the information current. What is happening as a result of the recent federal energy bill and the recent stimulus package to push solar energy in Utah?
Also, what is happening with national policy regarding net metering? In the past, only a few households will be able to join the program here in Utah because of the cap at .1% of Rocky Mountain Powers 2002 peak demand. That has now changed to 20% of the 2007 peak demand. See the DESIRE site at: http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=UT04R&re=1&ee=1
Daniel,
You are spot on we’ve got some work to do! We know it and will be updating our states shortly.
Cheers and stay tuned,
- Dan
I currently live in Florida where the state gave me a $20,000 rebate for putting in whole house solar. We are very pleased with it, but will be moving to Utah soon. Does Utah have any plans to invrease the rebate program? $2,000 is very little towards the output of $40,000. ilivhre@tampabay.rr.com
Any idea on wind power rebates in Utah?
Check out http://www.dsireusa.org. Click on your state, and you should see all of the available Renewable Energy and energy efficiency rebates.
Hello to all, I’m now with Suntrek Solar power, i will be operating out of Utah, from here forward. I will be more than happy to help with any questions anybody has about Solar Power or Solar Heating. I can give you info on any part of the state so please don’t hesitate to ask. kurt@suntreksolar.com
Will municipal power companies be required to comply with net metering in the future? That’s one more reason that I don’t like government competing with the private sector. If it’s run by the government, it’s socialized.
Buyers beware. although the solar incentives and rebates appear to be a great bargain, the Utah rebate of 7500.00 will require that you complete a w-9 which means that in the end, you will have to report the REBATE as income on your federal taxes. This may pop you into a higher tax bracket.
Am I not reading the Utah tax code correctly? I read it as a commercial photovoltaic system would qualify for a 10% state tax credit. I am reading the 10% tax credit excludes other forms of renewable power generation of 660kW or greater, pushing those other forms to the $0.35/kwh incentive plan. DSIRE has the sales tax exemption extending out to 2019, so between the two, thats about a 15% credit while keeping the SRECs. It would only take a SREC of $50 to push commercial solar into the realm of conventional financing.
On a side note, congrats to Rocky Mountain Power for having some of the clearest rate sheets in the nation. If only other power providers would follow their example.
Rebates & Tax Credits:State of Utah Renewable Energy Rebate Program$850.
Questar Gas Utah Rebates Solar Collector & 65 Gal SHWH$750.Utah State Renewable Energy Tax Credit/25% Of total System Cost.Federal Renewable Energy Tax Credit/30% Of Total System Cost.Before the installation a form should be filled out for the Utah Renewable Energy Rebate Reservation Application through the State Energy Program for the Utah Geological
Survey & Receive 25% of the total cost in a check.
I’m the Executive Director of a non profit agency serving refugees and immigrants in Salt Lake County. We want to install a solar panel system to make our building green. Are there grants and private donations that would help toward the solar panel systems? I appreciate your suggestions.
We need to do the same as Colorado and Arizona and push the Public utilities comm. to let the cities and rocky mountain pwr to have a increase of around .02cents a watt and we could make the numbers work. Utah is way behind on incentives for the State we need to have a 2.00 a watt rebate with no cap like CO and AZ. Thanks Greg S, Solectric Systems of Ut. Also we may be able to Donate some of the project you are speaking of just e-mail me and we could talk,
Does anybody know if there are any solar rebates planned for 2011?
who is the most credible solar contractor in Utah?
I would like to install a solar power system and solar heating system on my house in 2012. My system would need to be 5kW for the electrical portion. I have two 60 gallon hot water heaters that would require solar panels for heating these to operational temperatures and use the gas part as emergency back up. I can foresee the cost of electricity and gas for the house increasing to double the current prices in the next 5 years as the world economies improve. Want to become as self sufficient as possible before this happens. What kind of tax incentives and rebates can I expect from Salt Lake County, Utah??
I am currently a resident of CA and am building a home in Moab, UT. How can I gain the state credits for solar panels? Do I have to become a Utah resident?
Here is an odd situation. I installed my solar array in Utah at the end of 2010. To be able to take advantage of the state incentive on my taxes, it was necessary to first fill out several forms to get an approved “code” from the state. I couldn’t process that paperwork before the tax deadline, so I filed my return, paid about $8K in taxes due, and then later filed an amended return after receiving the “code.” Utah then sent me a $2K refund for the solar incentive. Ergo, I ended up paying $6K in taxes.
Yet now Utah has sent me a 1099-G, stating that the $2K incentive that they reimbursed me will be reported to the IRS as “income.” What…? I might be wrong, but if I had taken the incentive on my first return, rather than via an amended return, I cannot believe that the deducation would be reported as “income.”
What am I missing here?
I installed Solar on my house in West Jordan Utah, I worked with a company called SolarTek Solutions. They literally did everything for me they designed the system, filled out all of the paperwork for tax credits and rebates. if you want to send me an email I am sure I could have one of them call or email you arob.raines@gmail.com
When I built my home north of Ogden, some 35 years ago, I installed 4 Solar Panels. How I wish I would have covered my roof with them back then. The maintance on the panels has been nil, nothing, not even a wash job. I have replaced my batteries about 4 or 5 times, and bought a new modified sine wave inverter. Now at age 60, do I want to invest in a new, larger system and start selling it to Rocky Mountain Power? I just don’t know.
I’m a home owner in Lindon Utah and thinking about installing a solar system. I would like too start with a small system, 1 kwh, and add too it later on. Is it required too contact the power company too operate my smaller 1 kwh system before plugging into the grid?
Hey Syd,
If you want to jack into the grid and sell your power, the utility is going to need to be involved.